Construction Delays Result In Revocation Of Certificate To Build

August 16, 2019

Deadlines in construction can mean serious financial penalties for parties that are unable to meet the deadlines established in a construction project. In some cases, such as one recently heard before the British Columbia Court of Appeal, missing a deadline can mean having a permit to complete a project completely revoked. In the case we discuss today, the court had to determine whether or not the construction company had “substantially started” a project within the 10 year period given to them under their certificate’s requirements.

The certificate and the delays

The company in question obtained a certificate under British Columbia’s Environmental Assessment Act in 2004 which allowed them to start work on a resort. The certificate initially required work to be substantially started within five years, but that deadline was eventually extended to 10 years.

Unfortunately for the company, a number of delays arose during this ten-year period. These obstacles included a delay in obtaining a Master Development Agreement with the province, delays in obtaining municipal rezoning, and difficulties accessing the site following the closure of a Forest Service Road.

The initial plan for the project was for the construction of a 104 hectare ski resort, which could accommodate 5,500 hotel guests and 750 resort staff. The ski area would include 5,925 hectares of lift-serviced areas in addition to glacier skiing.

Work performed by the deadline

By the time the ten-year deadline had come about, the province had determined that a “substantial start” on the project had not been met. The company disagreed, stating the following work constituted a “substantial part.”

The first floor slab and foundation preparations for the day lodge at the resort base;

The first floor slab of the service building at the resort base;

The foundation anchors for the departure station of a quad chairlift;

A seasonal bridge to span Karnak Creek within the resort base area;

A temporary bridge at kilometre 15.8 of the Jumbo Forest Service Road;

The permanent bridge at kilometre 15.8 of the Jumbo Forest Service Road;

A well to provide potable water to the resort has been drilled and tested;

Clearing and grading of approximately 250 metres of construction access road within the resort base to allow access to the day lodge, service building, and the lift base foundation locations from the Jumbo Forest Service Road; and,

Improvements to site specific locations along approximately 4 km of the existing Jumbo Forest Service Road, including brushing, installation of culverts and ditch maintenance.

Nonetheless, the Minister of Environment for British Columbia revoked the certificate. At an initial trial, a chambers judge found the Minister’s decision to be unreasonable “because she failed to give consideration to the difficulties faced by Glacier in commencing construction,” asking the Minister to reconsider the decision. The Minister of Environment sought judicial review that decision.

The court’s analysis

While the Environmental Assessment Act does not define “substantially started,” the chambers judge found that the Minister failed to consider mitigating factors that led to the delay. The court, while sympathetic to these factors, found that they don’t prevent the clock from ticking, writing,

“The fact is, however, that proponents may fail to commence a project through no fault of their own: they may fail to secure financing; encounter landowners who are unexpectedly reluctant to sell their land or yield necessary rights; face municipalities that are not cooperative in allowing rezoning; or simply face public hostility. While we might sympathize with a proponent that has tried its best but failed to make a substantial start on a project, it does not change the fact that the statutory test has not been met.”

As a result, the Minister was no longer required to reconsider their decision.

At HMC Lawyers, our team of skilled lawyers knows that construction disputes and project delays can have massive impacts on your financial bottom-line. We work closely with our clients to understand their business and personal needs and identify the best potential outcome, then work diligently to resolve matters quickly and with certainty. To speak with one of our lawyers about a construction contract or delay claim, contact us online or call 1-800-480-3534. We represent construction clients in Calgary, throughout Alberta, and across Western Canada.

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